FairRelay: Fair Off-chain Incentives for Decentralized Physical Infrastructure Networks

Yingjie Xue, Jingyu Liu, Zifan Peng, Chao Lin, Jianan Hong, Xinyi Huang

Abstract: Decentralized Physical Infrastructure Networks (DePINs) utilize token incentives to construct permissionless physical infrastructure, but face challenges in ensuring fair compensation for resource contributors. Focusing on bandwidth provision in decentralized data delivery, existing decentralized incentive mechanisms incur prohibitive on-chain costs or employ oversimplified network topologies. We propose FairRelay, a protocol enabling fair, cost-efficient payments in complex multi-hop data delivery. We design two cryptographic primitives: 1) Accountable Multi-hop Data Delivery (AMDD) guaranteeing either correct data receipt or verifiable proof of misbehavior, reducing fair compensation to fee-for-secret exchange; and 2) Enforceable Accumulative HTLC (Enforceable A-HTLC) enabling atomic settlement across multiple off-chain payments via Payment Channel Networks (PCNs). FairRelay's fairness is formally proven within the Universal Composability (UC) framework. Evaluations demonstrate that FairRelay achieves zero on-chain costs in optimistic execution. Pessimistic scenarios incur constant-cost disputes (O(1) complexity), achieving 13.5% lower overhead than FDE (CCS'24), the state-of-the-art simplified two-party exchange solution (no relays). FairRelay achieves over $95\%$ encoding efficiency in 10-hop transmissions.

External IDs:doi:10.1109/tdsc.2025.3637286